For most Southern African countries, the year 2000 was a period of continued economic growth. However, negative growth rate recorded in Zimbabwe, which is estimated at -4.2 per cent, greatly affected average gross domestic product (GDP) of the subregion. For the 11 countries served by the Centre, aggregate GDP grew by 3.3 per cent in 2000, as compared to 3.4 per cent in 1999.

The generally improved performance in 2000 was mainly due to progressive implementation of macroeconomic policies in the subregion, strong business investment, particularly in transport and telecommunications, as well as favourable weather conditions. GDP rose at a sharply higher pace than in 1999 in some countries, including Angola, Mauritius, South Africa and Zambia. In other countries, GDP growth rate was either maintained or increased only marginally compared to 1999. Only one country, Zimbabwe, recorded a negative growth rate.

Most countries that managed to achieve higher growth rates in 2000 also registered an increase in foreign direct investment (FDI), which injected additional resources to the national economy. Investors in the subregion have been encouraged to make their investment partly because of the deepening of structural reforms and subsequent improvement in macroeconomic environment in most of the countries, coupled with the improvements in governance and democracy as well as the effective implementation of economic co-operation and integration agreements. The negative growth rate recorded in Zimbabwe was due to discontinued FDI inflows to the country arising from the political uncertainty after the occupation of farms in April 2000.

Inflation rates remained in the double digit in some countries, with average rate higher in 2000 than in 1999. The most prominent cases were registered in Angola and Zimbabwe. In Angola, for example, inflation is estimated to have reached 239.3 per cent in 2000, while in Zimbabwe inflation reached levels estimated at 59.6 per cent in 2000. High inflation rates in these two countries are the consequence of the continued civil war and the civil unrest after the occupation of farms in April 2000, respectively. On the other hand, annual inflation decreased significantly in two countries, Malawi and Mauritius. In the former, average inflation is estimated to have dropped from 44.8 per cent in 1999 to 28.4 per cent in 2000, while the corresponding figure for the latter is 6.9 and 4.6 per cent, respectively.

HIV/AIDS remained a major crosscutting concern for Southern African countries. Figures for 1999 indicate that 12 million people were living with HIV/AIDS in 11 countries of Southern Africa, with the cumulative number of deaths from AIDS being estimated at 973,700 for the same period.

Overall cereal crop in Southern Africa in 2000 was normal, notwithstanding the damage caused by floods and cyclones in some parts of the subregion. Cereal production, mainly maize, was above normal. However, continued food assistance was required in some areas affected by the floods and cyclones, mainly in Mozambique and to some extent, parts of South Africa, Botswana and Zimbabwe. In Angola, the food situation of some 2.6 million internally displaced persons was precarious.

Member States continued to make efforts towards the provision of social services such as education, health and sanitation. However, the actual provision and accessibility of such services, including employment opportunities continued to differ across the countries.

Infrastructure, particularly transport and communications continued to improve. Good progress were made in a number of areas including Air transport infrastructure and serviceability, although it continued to require further development to cope with the current and expected rapid growth of air traffic in the globalized economy. Institutional reforms were well underway in the sub-sector, and a regional, integrated air traffic safety system was developed. The telecommunications sub-sector, also improved considerably, with more private companies providing telephone facilities in most countries.

Although no new armed-conflict emerged in the sub-region, the impact of continuing war in Angola contributed to poor diversification of economic activities away from petrol and the subsequent paralysis effect on economic and social activities throughout the country. In addition, the civil war in the Democratic Republic of Congo continued to impose massive costs and increase poverty in neighbouring countries, particularly Angola, Namibia and Zambia.

Implementation and management of macroeconomic policies continued to vary from country to country. Nevertheless, the overriding objective of national policies did not in content divert from that of deepening structural transformation of the economy and the implementation of agreed economic co-operation and integration agreements in the respective countries. Thus, the need for economic co-operation and integration was appreciated by all member countries of the subregion as a fundamental requirement that will underpin future investment and growth into a large, economically viable and unified Southern African subregion.

Prospects for 2001 are rather uncertain due to the clouds of uncertainty usually associated with the vicissitudes of the external economic environment and weather conditions. However, there are in general, modest grounds for expecting continued improvements in the economic performance of the subregion. Average GDP growth rate is expected to be between 3.5 and 5 per cent in 2001.

This optimism is based on the assumption that member States would continue to implement economic reform programs and deepening market-based private sector driven policies. In addition, the effect of COMESA Free Trade Area, the entry into effect of the SADC Trade Protocol, as well as the commitments by the member States to pursue and effectively implement far-reaching economic co-operation and integration policies, are some indications that would greatly assist to boost investors confidence in the subregion. The expected increase in investment, both foreign and domestic would, in turn, translate into higher levels of economic growth in the subregion.